Monthly Archives: March 2010

Asset manager and Bloomberg commentator Mark Fisher probably should avoid historical analogies in future commentary. In a recent column he begins portentously: “Historians cite the late second century as the turning point of the Roman Empire, when the once- proud, feared society began its descent into infamy.”

He continues: “As the ruling class was undermined by civil wars and attacks by outsiders, the Romans’ respect for law and social institutions began to erode.”

And then: “The U.S. today is a mirror image of the Roman Empire as it tipped into chaos.”

Come again. A mirror image? I had noticed that American political divisons are sharp and rhetoric high but I had not noticed that civil war had actually broken out, let alone civil wars. The U.S. was attacked horrendously on 9/11 but the barbarians are hardly at the gates.

But not deterred, Fisher forges on: “The Roman economy grew fat from the plunder of conquered territories and the added productivity offered by new lands. The waning of expansionism didn’t bode well for the empire.”

Actually, American overseas adventure recently hasn’t involved getting “fat from the plunder”, in fact quite the reverse with waste of treasure and lives. A mirror image indeed. Asset managers should stick to asset management and leave history to others. Sadly, RealClearPolitics chose to feature the Fisher column in its markets section.

Just because actress Joanna Lumley was superb campaigning on behalf of Gurkha veterans doesn’t mean she should be given a pass for the nonsense of arguing that knife crime has grown in Britain because of the decline of Empire. How does the loss of Empire explain teenage Brit girls wielding knives these days? Other European countries have lost empires and not suffered an epidemic of knife crime. “Broken Britain” – a collapse of morals and discipline – would seem a more likely explanation.

The Chicago Tribune today reports on its own bankruptcy case, noting that in the 15 months since the Chicago-based media company filed for bankruptcy, law firms have taken about a quarter of the Trib’s cash flow last year in fees — $138 million.

Usefully, the report details also some recently costly bankruptcy cases: Enron ($793 million), United Airlines ($296 million), Delphi (just under $400 million). Lehman Brothers is heading to break records — the legal fee cost is already at $457 million with a considerable way yet to go.

Apparently The Times editor, James Harding, shares my thought that there is a financial flaw in News International’s paywall plan. Why pay 8.50 pounds a week for the print editions of The Times and Sunday Times when you will be able from June to read both online for 2 pounds?

According to Harding that price difference is exactly the point. In a Q&A session with readers he made this comment: “I hope that what we’re doing is providing a simple price and one that, even in these difficult times, is affordable. It’ll be £2 a week for all seven days. The print editions will cost you £8.50. And, I hope, that over time you’ll see that the digital editions of The Times and The Sunday Times will give you so much more…”

In other words this is a game-changing approach designed to slowly kill the papers and turn them into digital online products while bringing the readers along at the same time. Harding says that the digital product to be launched will be innovative. “We can do so much more online: we can provide video, interactive graphics, personalised news feeds and a chance for people to engage, directly, with our journalists.”

Obviously, this is a big market to play in with some tough rivals. They include the BBC and ITN, who both have free sites. Can News International pull this off? Certainly it is a brave move and one preparing the papers for a time when most readers will read their papers on tablets, I-Pads and computers. Curious, though, that one had to find out Harding’s thoughts in a Q&A session and that News International hasn’t marketed or announced such thinking behind the paywall.

So Rupert Murdoch will start in June throwing a paywall around the websites of The Times and Sunday Times. Online readers will be charged £1 for a day’s access or £2 for a week’s subscription. Payment will allow access to both websites.

A weekly subscription will give readers also access apparently to an e-paper version and other new, as yet unnamed, digital applications. Those who already subscribe to the print edition of either paper will also gain free online access. The Times editor is gung-ho: “Now, we are leading the way again. Our new website – with a strong, clean design – will have all the values of the printed paper and all the versatility of digital media. We want people to do more than just read it – to be part of it,” James Harding announced in a press release.

He continued: “The coming editions of The Times on phones, e-readers, tablets and mobile devices will tell the most important and interesting stories in the newest ways. Our aim is to keep delivering The Times, but better.”

Now let’s see if it works. I have written elsewhere on this blog that Murdoch doesn’t really get the Web – News International was much slower than its UK newspaper rivals at the Guardian and the Telegraph, to exploit the Web. Likewise in the U.S. with American cable rivals. His belated internet purchases to try to catch up have fizzled badly: he over-paid for already established sites and has generally made a hash of them, MySpace being the best example.

Paywalls as conceived by Murdoch may be over aggressive at this stage. Total paywalls may well put off users, especially in the absence of rivals following suit – a blend of free and paid-for is far more likely to succeed. Paywalls have an effect of reducing online social marketing, blocking blogs and social media sites from linking to stories and giving them wider dissemination.

Clearly, as the online World develops and as new tablets and e-reader devices are developed, paying for content is likely to reassert itself: there will be a convergence of hardware, reading habits and the ability to personalise and market more surgically that will encourage payment. And those who really want real news – you know, the kind that actually involves news-gathering and reporting facts as opposed to opinion-mongering and shouting at opponents on talk shows – will need to pay if they want to get anything of value or authority. News-gathering is expensive. The waning of real reporting and the reduction in the numbers of real reporters able to place events and facts into context in an informing way is becoming ever more apparent.

But is Murdoch too early and too over-reaching? I suspect so. For instance, News International clearly has made the decision to keep the price low for online access in order not to drive away online readers. But is the price too low, if the company wants to keep people buying the actual print editions? Why spend 6 pounds a week on buying the hard-copy The Times when one pound will get you a week’s online access plus other features? Two pounds will get you both papers online. And that doesn’t even factor in the cost of a copy of the print edition of the Sunday Times. Okay, you can subsrcibe to the papers and get everything. But we shall see what we see.

I am waiting to see if radio talk show host Rush Limbaugh fulfills his pledge to move to Costa Rica, if so-called Obama-care were passed by Congress. The central American state is an interesting choice — the country has a pretty good government-run health care system. A website has been set up to buy Limbaugh a one-way first-class ticket.

Who was it who wrote, “The past is a foreign country. They do things differently there”? I would have thought Limbaugh would do better with a time-machine and to return to an America pre-Theodore Roosevelt.

Of course, if he fails to depart — the most likely outcome — then he would be joining other notables who have threatened to fly off, but failed to do so, if this or that legislation were passed or this or that fellow elected. Cast your minds back to Obama’s predecessor. Actor Alec Baldwin threatened to go, if George W. made it to the White House. In the event he decided he couldn’t drag himself away from Hollywood.

The alibi former Labour Cabinet minister Stephen Byers gives in the latest sleaze scandal to hit the British Parliament just doesn’t wash. Byers, who was caught along with two other former Cabinet colleagues ready to accept cash from a bogus U.S. lobbying firm to influence current U.K. government ministers, has pushed out a double defence: first, he claims he was just exaggerating his sway with serving Cabinet members, and second, he had never actually lobbied anyone.

Presumably, he left out the word “yet”.

According to Byers therefore he has not breached any Parliamentary rules. The second excuse presumably does let him off the hook technically. Parliamentary rules bar a sitting MP from accepting cash to lobby the government or to shape legislation. But while he might not have broken the letter of the ban, surely he broke the spirit, and if the U.S. firm had not been a make-believe company “created” by undercover reporters, he would have been ready to breach away.

The transport and trade former minister, who plans to step from Parliament at the next election, claimed to undercover reporters that he was a political “cab for hire” who had secured secret deals with ministers and helped firms to get around price-fixing rules. Byers said that he charged up to £5,000 a day.

Patricia Hewitt and Geoff Hoon, the other former ministers caught on camera, also deny any wrongdoing and insisted they had breached no rules.

Presumably, PC Plod can’t charge him with fraud as the company he was seeking to defraud doesn’t actually exist.

Maurice Levy, the head of marketing group Publicis, strikes me as making sense when it comes to the newspaper pay-wall debate. Unlike Rupert Murdoch (see earlier posts), Levy is far more nuanced about the balance that will be needed probably between free and paid content — that is if newspapers are going to attract traffic and not put off readers while at the same time making some money.

Speaking to MediaGuardian at the start of the inaugural Abu Dhabi media summit, Levy, stressed that it is “not enough to have a big audience on the internet”, with media companies needing to find a mix between free and paid-for online content to survive in the digital era.

“The future of analogue media will not be supported by advertising alone. They will have to have profitable access to the internet. It’s not enough to have a big audience on the internet,” he said.

“Content has value and that’s something for which I have a strong point of view. I think media giving away their content is not a good service to themselves. It’s a shame, a pity. This content has a lot of value and it has to be valued reasonably,” he said.

The key will be to have some content that is free, but other elements only available for subscribers.